[Toddsterpatriot]

Forget options. That's a different topic. The only people legally allowed to sell naked short and fail to deliver are specialists in the stock and option market makers who trade options on the stock.

I don't think this is in the same league as Enron or Worldcom. If the SEC cracked down and all these FTDs had to be covered, these stocks would all rally and these short sellers would lose big money. Since there are more long shares than short shares in existence, net-net there would be more money made than lost.

[investigateworld]

Gotcha, thanks.

[antaresequity]

these stocks would all rally and these short sellers

In order to 'rally', you need buyers with real money. If all the FTD's were forced to cover or return, the money to buy would have to come from somewhere?

If they don't have the cash to cover, then they are going to sell somthing...and if that is a security you now have downward pressure on the markets. And of course there is the possiblity that they would just liquidate and run...

Needless to say, investor confidence would plummet, adding further downside pressure..

Obviously the SEC needs to do somthing...